Consumers Are At A Disadvantage In Markets
Consumers are generally amateurs attempting to compete with professionals. The professionals use a wide variety of psychological tactics to maximize the money extracted by misdirection, hiding information, and fostering irrationality. Regulations can alleviate this problem.
- Algorithmic Prison (18 links)
- The algorithmic prison idea is that big data allows business and government to deny us loans, jobs, right to travel, etc. without our knowing why or being able to contest and change the data. This also makes us very vulnerable to dirty tricks.
- Casinos’ worrying knack for consumer manipulation [More...]
- A number of examples of how various industries make it extremely difficult to know if you are getting a good deal and exploit addiction by design. Based on the book Addiction by Design: Machine Gambling in Las Vegas by Natasha Schüll.
- Help Stop The Payday Loan Debt-Trap Scam [More...]
- "Instead of evaluating risk in order to block loans to people who couldn’t pay the loan back, the payday loan industry tries to find poor, desperate people, dangles loans in front of them, and then traps them into a cycle that drains them of everything. The 'debt trap' is the actual business model, and they say so."
- The Elasticity of Demand With Respect to Product Failures; or Why the Market for Quack Medicines Flourished for More Than 150 Years [More...]
- Markets did not punish the quack medicine industry due to unusually low elasticity of demand with respect to product failure and bounded rationality. The conclusion mentions that recent resaerch shows the FDA increased consumer welfare.
The invisible hand of the market makes a very good pickpocket.